The Rise and Fall of the Multilateral Agreement on Investment Where Now
The Multilateral Agreement on Investment (MAI) was intended to be a comprehensive multilateral treaty that established a framework for the liberalization of international investment. It was negotiated during the late 1990s by the member countries of the Organization for Economic Cooperation and Development (OECD) and aimed to provide investors with greater protections and to open up a level playing field for investment across the world.
However, despite the initial enthusiasm for the MAI, the agreement faced significant opposition from civil society organizations and many developing countries. Critics were concerned that the MAI would give too much power to multinational corporations and that it would undermine the sovereignty of individual states. Others were concerned that the agreement would lead to a race to the bottom in terms of labor and environmental regulations.
These fears were compounded by a lack of transparency in the negotiations and a lack of public consultation. As a result, the MAI faced a growing backlash, and by the late 1990s, many countries began to withdraw from the agreement. In 1998, France announced that it would no longer participate in the MAI negotiations, and other countries soon followed suit.
By 1999, the OECD announced that it was suspending the negotiations for the MAI, effectively ending the agreement. While some of the provisions of the MAI were eventually incorporated into other agreements, the comprehensive multilateral treaty that was originally envisioned never came to fruition.
So where does that leave us now? The backlash against the MAI served as a wake-up call for many policymakers, who realized that they needed to take a more inclusive approach to international investment. In the years since the MAI negotiations, many countries have moved away from the “one-size-fits-all” approach to investment liberalization and have instead focused on developing more tailored investment policies that take into account local needs and priorities.
At the same time, many civil society organizations and developing countries have become more actively engaged in the global conversation on investment and have succeeded in pushing for greater transparency and public consultation in investment negotiations.
Overall, the MAI serves as a cautionary tale of the dangers of pursuing investment liberalization without due consideration for the concerns and needs of all stakeholders. Going forward, policymakers must remain mindful of the lessons learned from the MAI and work to ensure that their investment policies are inclusive, transparent, and responsive to the needs of all.